If you can't beat 'em: Intel seeking stake in Chinese chipmaker Spreadtrum – report

Hopes to leapfrog Qualcomm in China mobile market

Ever eager to gain ground in the mobile chip market from such rivals as Broadcom and Qualcomm, Intel is reportedly considering a substantial investment in Chinese smartphone chipmaker Spreadtrum.

Reuters reports that Chipzilla is close to announcing a deal with the firm, citing anonymous sources. No specific figures have been leaked so far.

Spreadtrum is a fabless semiconductor company headquartered in Shanghai that specializes in building turnkey chipset platforms for mobile phone vendors.

Put another way, it makes silicon that lets phone vendors bash out kit cheaply. For example, it was Spreadtrum that partnered with Mozilla to create the system-on-chip (SoC) for the much-buzzed-about $25 (£15) Firefox OS phone.

Perhaps more importantly, however, Spreadtrum has been cooking up chips for the China market – specifically, SoCs that support the Middle Kingdom's homegrown TD-SCDMA 3G mobile networking spec.

The firm's product – which has been described by state-run media as a "breakthrough" and a "wonderchip" – reportedly integrates a processor, analog baseband, power management functions, and a TD-SCDMA radio onto a single piece of silicon.

Industry-watchers have fretted that the combination of homegrown chips and an oddball communications standard suggest the PRC government is trying to steer the country's smartphone industry toward using local suppliers, rather than imports from the US and elsewhere.

Spreadtrum has ties to the government and its products have the backing of China's IT and science ministries.

Lending further fuel to the idea that China is mounting a major protectionist push, the Middle Kingdom has increasingly been bringing its seven-year-old anti-monopoly law to bear on US tech firms – including Qualcomm, the world leader in mobile chip shipments, which Chinese authorities have called a monopoly.

By claiming a stake in Spreadtrum, Intel could potentially gain much-needed market share via the Chinese market – widely believed to be the largest developing smartphone market in the world – particularly if Qualcomm is shut out by regulators.

Reuters' sources suggest Chipzilla may be negotiating its investment with Tsinghua Unigroup, a government-backed fund that owns both Spreadtrum and fellow fabless semiconductor firm RD Microelectronics. What portion of Spreadtrum Intel may be looking to buy, however, is not known. ®

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